Harris Corp. To Buy CapRock for $525 million

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WASHINGTON — Harris Corp. of Melbourne, Fla., agreed to pay $525 million to acquire managed satellite network services provider CapRock Communications, Harris announced May 21.

CapRock of Houston is a privately held firm with 700 employees that specializes in communications services for government and commercial customers in remote locations such as battlefields and oil rigs. The company had an operating income of $28 million last year on revenue of $359 million, Harris said in a press release. The deal is expected to close late this year.

Harris is a $5 billion communications and information technology company with 15,000 employees, about half of whom are scientists and engineers, the release said. The company produces communications hardware and software for government and commercial customers in 150 countries around the world.

“Acquiring CapRock expands our international presence and customer base, while increasing the breadth of our assured communications offerings,” Harris Chairman and Chief Executive Howard Lance said in a prepared statement. “We see increasing demand for outsourced managed communications services that include secure, high-availability networks, creating growth opportunities across a variety of markets. The acquisition provides an entry into the energy market, while expanding our present offering for the government and maritime markets to include managed satellite communications solutions.”

In space, Harris is primarily known for building satellite communications antennas and ground terminals. In 2008, the company nabbed multiple U.S. Navy contracts to deliver the majority of new X-, C- and Ku-band terminals as the service transitions away from L-band satellite communications. Last year, the company won a $736 million contract to develop the ground segment for the next generation of U.S. geostationary weather satellites and a $600 million Army contract to deliver ground terminals for the Wideband Global Satcom fleet. Harris is also building the deployable reflectors for the Navy’s Mobile User Objective System communications satellites.

The company also develops satellite command and control software and tools for intelligence data exploitation.

CapRock is one of three so-called integrators that the U.S. Defense Department uses to design and manage communications services and networks using capacity acquired on the commercial market. The Defense Information Systems Agency’s Defense Satellite Transmission Services-Global contract runs through 2012, after which CapRock’s role in this area is uncertain.